Uber Technologies Inc and Lyft Inc are preparing to suspend their ride-hailing services in California beginning on Friday morning unless an ...
REUTERS: Uber Technologies Inc and Lyft Inc are preparing to suspend ride-hailing services in California, barring an appeals court ruling overturning an order to treat their drivers as employees and not independent contractors.AdvertisementUber, in a separate blog post on Tuesday, said it would have to temporarily shut down unless the appeals court intervenes. The company did not respond to requests for comment Thursday on whether it would also shut down at midnight.
The appeals court has not yet intervened and it remained unclear whether it would take up the case before Thursday evening. California appeals courts have historically dealt with large backlogs, which have increased during the pandemic.The threat to suspend service in the most populous U.S. state marks an unprecedented escalation in a long-running fight between regulators, labor groups and gig economy companies that have upended traditional employment models around the world.
Uber's fast-growing food delivery business Eats is not impacted by the shutdown, the company has said. Other gig economy companies, including DoorDash and Instacart, will also be able to continue operating under the contractor model. Uber and Lyft say the vast majority of their drivers do not want to be employees. The companies say their flexible on-demand business model is not compatible with traditional employment law and advocate for what they call a"third way" between employment and contractor status.
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